The BBVA surprised the market when it announced its “negotiations to explore the possibility of a merger” with Sabadell Bank on April 30th.
The merger of two entities With a market value of over 70,000 million euros and a volume of assets of 1,037 trillion euros, it is the largest bank in Spain.
On April 30, the BBVA notified the National Securities and Markets Commission. Negotiations Exploring Possible Mergers Between both entities on the ground that “advisors have been appointed for this purpose.”
If the merger is realized, its assets will be higher than Kaisabank, being the largest bank in Spain, and will be the third largest in Europe after BNP Paribas, just behind Banco Santander if international operations are added.
Unprecedented, this is not the first attempt by BBVA to merge with Sabadell. In November 2020, the two companies revealed they were negotiating a merger, but as Sabadell said, they did not reach an agreement on the final price of the business.
Sabadell Bank commented that they expected the merger to commence through stock exchanges rather than cash like the BBVA.
Following the announcement of the BBVA, the entity fell 6.65% in the stock market, while Sabadell rose 3.37%.
Ricardo Zion, professor at EAE Business School, shared the calculated effects of the merger, revealing that it could lead to employee resignation.”, Consider any overlaps that can be generated by cost reductions and synergistic effects. He shared that of the 140,000 duties held by the two banks, at least 4,000 employees will impact their operations.
However, the BBVA’s claim to mergers took into account the acceleration of European banking markets as Spain rose to the position of international banking.
